PwC tax partner Paul Abbey has suggested that state governments could progressively phase out stamp duty on residential property sales in favour of a tax regime based on land values. Abbey has proposed that buyers could opt to pay stamp duty immediately or pay an annual transfer duty replacement tax at a fixed rate of about 0.5%. Abbey notes that land tax is widely acknowledged as being more efficient than stamp duty. From The AFR:
“There’s a strong recognition that land tax is a more effective means of taxing land than stamp duty and that it eliminates a lot of the defects, but the issue that everyone struggles with is how do you make an effective transition?
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